Lights, Camera and…Insuring the Action

Picture this: a film crew is shooting a movie on an elaborate set designed to look like a 19th century market, but that is actually inside a furniture warehouse. The crew is filming a nighttime scene and lighting equipment serves as a stand-in for the moon. But according to the director, the lighting is all wrong. So the expensive, and incredibly hot, light is raised higher and higher—and closer and closer to the ceiling—in an attempt to get the “moonlight” just right.

And then the sprinkler system activates. The film set is soaked and needs to be rebuilt, the cast and crew are drenched and miserable, and all the furniture that was pushed aside to make room for the now-soggy set is also damaged.

Claude Forest could spend hours telling stories just like this. Forest is the principal and senior broker at Multimedia Risk, a Winnipeg-based brokerage that provides insurance and risk management solutions to the entertainment industry. His clients are largely film and television producers (the facilitators behind everything you see on screen), and, by the very nature of their business, they’re faced with an extraordinary variety of risks.

“Entertainment is quite a unique exposure,” says Adam Grenville, a senior underwriter of film and entertainment insurance at Chubb, who has worked with Multimedia Risk for several years. “We don’t typically see the same things coming in day in and day out.”

To best protect against his clients’ exposures, Forest has to know what those exposures are. It’s a task that may seem obvious, but in reality is anything but.

“Unlike the manufacturing of chairs or widgets, every time our client does something, there are all new circumstances. Even if they’re [only filming] romantic comedies, sometimes that romantic comedy might be set in a studio in Toronto, or on location in Toronto, and the next time it’s going to be done in Paris or Kazakhstan, or on a ship at sea,” says Forest. “There are so many variables.”

But with his own background as a cameraman and documentary producer, Forest is well-positioned to help his clients navigate the risks they face with each project. “[His] background gives him a unique understanding of the production process, and [of] the real risks rather than perceived risks,” says Tom Cox, managing partner of SEVEN24 Films and a longtime client of Multimedia Risk. “It provides him with insights that lead to practical solutions. That important fact sets him apart from the average broker.”

Act One

In 1989, Forest was stunned when his father Georges announced he was going to sell Agence d’Assurance Forest Limitée, the family’s personal lines insurance brokerage. As the eldest son, he’d been groomed for succession from an early age and, after finishing high school in the early 1970s, he’d joined the firm as a full-time junior broker. But Georges, a technophile, had also fostered within his son a love of photography, and that passion took his son far away from the family’s Winnipeg business.

By the mid-1970s, Forest had decided to pursue a career behind the camera instead of one as a broker. He landed a position as a lighting technician and camera operator at the CBC in 1976, and four years later got a job working for the Telejournal du Montreal, covering the Prairies, Northwest Territories and US Midwest. “I was in an area where there wasn’t a lot of hard news, really. There wasn’t a lot of political news in those years,” he explains. “Which was really good from a professional point of view as a camera operator and director, if you will, because I could be telling these human interest stories, which took longer to tell.” With this technical and artistic experience under his belt, Forest started his own television documentary production company in 1985.

He was in the middle of finishing a documentary, three years in the making, when his father made his announcement. Forest says he’d always assumed the brokerage would remain in the family, so he told his father he’d come work at the office one day a week in an effort to keep the business open a little longer. His father was delighted. On February 14, 1990, after finishing up his documentary, Forest arrived for his first day of work at the brokerage he’d left more than 15 years earlier. And, that evening, Georges Forest passed away. For his son, the event has a kind of cosmic significance. “After a long absence, the prodigal son returns (part-time) and then the day I come back into the doorway it was like he makes a stage exit and pushes me through the door.

“At first, I thought that my adventure as a filmmaker was over,” he says. “Rather than schmoozing at the Toronto festivals or at Cannes, I would be schmoozing at the local hotel, with my local clientele. But there was another opportunity that emerged immediately in those first three years, and that was that my community of [Winnipeg] filmmakers was going to Toronto to get their insurance.”

Within the first few months of taking over the brokerage, Forest decided that he would also specialize in film and entertainment insurance and serve the burgeoning Winnipeg film community. In the summer of 1990, he travelled to Toronto to meet with the few carriers that offered coverage to the entertainment industry. While in Toronto, he met Kirk Thompson, an entertainment specialty broker whom Forest describes as a mentor. In 1998, after eight years of working with Thompson, and after several changes within the Manitoba insurance industry led him to sell his personal lines book, Forest re-branded his brokerage and launched Multimedia Risk. The brokerage has grown from a one-man shop to a 12-person organization headquartered in Winnipeg’s trendy Exchange District, that does business across Canada and the United States.

No Business Like Show Business

With his 15 years of experience working in film and television, and having dealt with the pressures of production, Forest is well-versed in the chaos his clients face with every project. And he’s equally aware of the importance insurance plays to the success of their projects. “Film and television projects require insurance for a wide variety of special talent—from Hollywood stars to high-risk stunt people, and from trained bears to wild buffalo. We also need insurance for unique circumstances—from choreographed and controlled burns, explosions, fights and crashes, to working in extreme weather and extreme environments. Everything you see on screen requires insurance of some kind,” says Cox.

In addition to the usual, standard insurance against damage or injury to property and people, film and television projects must have insurance against their unique business interruption risks. “The causes of business interruption are much broader in the film and television space because of the importance of the creative people who are behind or in front of the camera,” explains Forest. “The most dramatic example is the star who dies in the middle of a movie—and there are recent notable examples. Or the more oblique risk of a star being emotionally incapacitated because of the news of a loved one who’s just died or been injured. So think of being in front of the camera and going through your work flow [when] you get a phone call…and you learn that your child has been hit by a car. You can’t work, right?”

Film and television projects also require coverage for the equipment and technologies that translate what a cameraman films into what audiences see on screen. “There’s the potential of a risk or exposure compounding itself over many days of shooting with faulty stock, faulty equipment, or even for all of that stuff to get to the lab only to have a faulty process in the lab. A scratch, or the leader breaks, and all the film gets cooked,” says Forest. And, in an industry where the majority of image and sound capture is now done digitally, there’s the added risk of accidental erasure or the failure of a hard drive.

Errors and omissions is another important coverage that Forest’s clients must have. Merit Jensen Carr, president of Merit Motion Pictures, has produced many documentaries with complex legal and insurance needs, and has worked with Forest for more than 15 years. “We did a show for CTV, a one-hour documentary called Virgins and Vixens…about the role that the media plays in influencing the sexualization of teenage girls,” explains Jensen Carr. The production used music and clips from high-profile Hollywood films to prove its thesis, but had to make sure that every clip could be considered fair use (the limited use of copyrighted material without permission from the rights holder for the purpose of criticism, commentary, research, etc.). “You have to understand the legislation. You have to understand what you can get away with and what you can’t. I don’t know many [other brokers] that understand the legislation well enough to talk about that with me in an intelligent way,” says Jensen Carr. “So we talk to our lawyer about that, but I’ve also involved Claude a lot.”

The Million-Channel Universe

The world’s hunger for filmed entertainment will likely never subside, and there are more sources to feed this hunger than ever before. Today, consumers can browse hundreds of specialty channels for programming that meets their specific tastes, spend small fortunes at the cinema to watch films from around the world, sign into Netflix for original programming or watch the countless web series that exist online.

For the producers of this content—Forest’s clients—this situation has been both a blessing and a curse. “The good news for the client is the client now has a lot more outlets to sell to,” says Forest. The bad news is that these outlets are all fighting for the same commercial dollar. “So on the one hand, you have this whole opportunity of many, many more hours of programming to fill, but you now have less money to fill them.” And smaller budgets translate into smaller premiums for Forest. On top of that, the cost of the technology needed to create this content has also gone down. While this may be good for clients, the value of what Forest is insuring has also decreased.

“Now, a complete world-class, full [production] facility might have $2 million of gear, when 20 years ago they had $25 million of gear. So from that point of view, somebody looking at the bottom line premium, and then, of course, the commissions, everybody’s been suffering in the past 10 years,” he says. “In a world with smaller commissions, you need to have volume.” Enter Integro.

The Acquisition

In November 2013, it was announced that Integro Insurance Brokers had purchased Multimedia Risk—the latest of several international entertainment acquisitions by the New York-based company. Even though Multimedia Risk was licensed and doing business across Canada, with an office in the United States, it was still a fairly small player in the entertainment insurance space, says Forest. The Integro acquisition gave Forest three very important opportunities. First, the acquisition would give Forest and his company, which will continue to operate under the Multimedia Risk brand, a wider reach. “It’s the difference between being a small boutique operating in the independent film world to being able to see having the resources to go after the large studio. That’s not on my immediate doorstep, but that’s within my reach,” says Forest.

Second, the acquisition would relieve Forest of many of his administrative responsibilities, allowing him to focus more on business development. “When your administrative resources are competing with your sales and outreach resources, that becomes more of a challenge. So what I saw in this opportunity were the resources to fulfill what I had initially dreamed,” which was to offer his clientele the best service and product offerings possible. Joining the Integro team allows him “to be involved in a more significant way with underwriters across the globe, and [be] able to deal with clients no matter where they’re located.”

Third, and last, the acquisition will give Forest the opportunity to share his unique breadth of knowledge with other brokers across the country. “[Multimedia Risk] has a North America-wide presence but, currently, the expertise physically resides in Winnipeg. Part of our strategy is to replicate that expertise in Integro’s other three Canadian offices [in] Toronto, Montreal and Vancouver—all of which are entertainment hubs,” explains Mark Rankin, president of Integro Canada. Forest is clearly excited by the prospect of mentoring the next generation of film and entertainment brokers (the “rainmakers,” as he calls them)—and that’s a good thing for clients, and the industry. “Like any other profession, as an insurance broker, in order to be of value to your clients you have to know their business inside and out. I have come to discover that the entertainment industry has a unique lexicon and if you don’t speak the language you will have no credibility,” says Rankin. “Claude knows the entertainment industry, at all levels, exceedingly well, and this translates into high-quality service and results for his clients.”

For Forest, the acquisition is just the beginning of a new, exciting chapter in what has already been quite the career. Call it the next act.
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Copyright 2014 Rogers Publishing Ltd. This article first appeared in the April 2014 edition of Canadian Insurance Top Broker magazine